Cellulose was treated with subcritical water in a batch reactor within a temperature range of 200-300 degrees C and reaction time of 5-60 min. The main phases, such as water-soluble fraction, acetone-soluble fraction and solid residue (remaining cellulose or char), were separated and analyzed. The analysis of water-soluble phase was done by HPLC equipped with UV and RI detector, whereas acetone-soluble phase was analyzed by GC-MS. Total sugar content was determined by the phenol-sulfuric acid colorimetric method. The properties of char such as specific surface area, pore volume, and pore diameter were determined by gas adsorption method. A water-soluble phase mainly consists of sugar monomers and monomer degradation products, while acetone-soluble phase, referred to also as bio-oil, consists of furans, phenols, carboxylic acids, aldehydes, ketones, and high molecular compounds. The reaction mechanism of cellulose in subcritical water has been proposed based on the obtained results.